George Osborne: 'MoD pays for Trident'
Updated on 17 August 2010
Chancellor George Osborne tells Channel 4 News the Ministry of Defence will have to pay for a replacement for the UK's nuclear deterrent in the latest salvo of an ongoing row between the Treasury and the Ministry of Defence.
His comments contradicted claims by the Defence Secretary Dr Liam Fox that talks were "constantly going" on which department would be responsible for the £20bn cost of replacing Trident.
In an interview with Channel 4 News economics editor Faisal Islam, Mr Osborne said the money would come from the MoD's budget.
"I'm very clear that the replacement of the nuclear deterrent - the Trident renewal programme - has to come from the Ministry of Defence's budget. And they know that."
More from Faisal Islam's interview with George Osborne
- George Osborne defends budget cuts
In a speech last week, Dr Fox had warned about playing "fast and loose with the country's defences", and had warned it would be "very difficult to maintain what we're currently doing in terms of capability" if the MoD was forced to meet the capital costs of building the new submarines from within its core budget.
Mr Osborne had warned defence officials in July that the MoD should not expect special treatment over the replacement of the missile-carrying submarines, even though the nuclear deterrent has previously been funded separately from the defence budget.
A full-scale review of defence spending and priorities is under way, replacing Trident is exempt from the process.
Mr Osborne's comments came after his keynote speech where he had defended the government's proposed programme of budget cuts saying growth and fairness are now his two guiding principles.
The chancellor reaffirmed his commitment to carrying through the cuts in a speech to city analysts in central London today.
He said: "I am optimistic that if we stick to the course we have set ourselves then we can navigate our way through to calmer waters.
"The alternative is to change course which is the surest way to disaster; it would wreck the British economy."
'Grown up government' will disagree
Nick Clegg mentioned yesterday that he could understand why someone facing a housing benefit cut might have difficulties with the funding going to Trident, writes Channel 4 News Economics Editor Faisal Islam.
"People should get used to grown up adult government, unlike the soap opera under Tony Blair and Gordon Brown. When there are differences in opinion they are honestly articulated," the chancellor told me, though he didn't seem to endorse Trident warmly.
I asked him about the suggestion that the whole capital cost of Trident was to come off the MoD budget, effectively a further cut.
"I'm very clear that the replacement of the nuclear deterrent - the Trident renewal programme - has to come from the Ministry of Defence's budget. And they [the MoD] know that."
It, particularly the last four words seemed something of a stinging rebuke to the defence secretary's suggestion, made on Friday that: "How [the Trident] budget is funded is a conversation that is constantly ongoing with the Treasury".
The really important thing here is that the battle over defence funding is simply the most public of a series of private conversations being had right now.
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